Page 126 - Mansfieldr FY20 Approved Budget

economic substance of the transaction. If the competitive bidding process is not conducive to soliciting
the lowest cost of financing a bond issuance, the City may choose to negotiate the sale.

Negotiated Sale: The City shall seek to weigh the selection of underwriter before negotiating a bond sale.
The selection of the underwriter shall encourage the best economic environment in which the City will
benefit from selling its bonds. Typically, negotiated sales will occur when the market volatility is
unpredictable. In some cases this may mean investors are not willing to commit capital in uncertain
economic environments, or the size of the issue may not attract the bids for a successful sale. Moreover,
the primary purpose of the negotiated sale is to solicit the interest rate environment for the City to sell
bonds.

Private Placement: The City will seek to privately place its bonds with a select group of investors when
the issuance warrants the sophistication of the buyer. The City will ensure that the placement fee is less
than a typical underwriter’s fee in a negotiated offering of a comparable type sale in a similar sale
environment.

Refunding of Debt

The City of Mansfield, Texas shall monitor the municipal bond market for opportunities to refund
outstanding debt to save the City from future interest costs. As a general rule, the savings shall be at least
3% greater than the cost of carrying the existing debt inclusive of issuance costs and any cash
contributions. However, if the value of the savings exceeds the cost of the refunding and is greater than
$100,000 but is less than 3% of the savings, then the City shall consider refunding the existing debt.
Arbitrage rules are to be considered when refunding debt.

Credit Objectives

The City of Mansfield, Texas shall seek to attain and maintain the highest possible bond ratings for its
outstanding debt without compromising the delivery of basic City services. Currently, the City maintains
four ratings with Fitch, Moody’s, and Standard & Poor’s.

Fitch, IBCA Moody’s Standard & Poor’s
General Obligation AA+ Aa2 AAA
Sales Tax Revenue AA+ Aa2/3 AA-/A+
Drainage Revenue AA Aa2 AA
Water & Sewer AA+ Aa2 AA+

It is and will be the continued policy of the City of Mansfield to provide full disclosure of information
about the City’s operating activity to the rating agencies. The City shall maintain an open line of
communication with the rating agencies to allow for the free exchange of information between the City
and the agencies.

Secondary Market Disclosure

SEC 15c2-12 regulations became effective July 3, 1995. The City shall continue to provide financial data
to the Nationally Recognized Municipal Information Depository (NRMSIRs), EMMA and the State
Information Depositories (SIDs). The City will and has complied with secondary reporting requirements
of SEC 15c2-12.

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